Kimbell Royalty Partners Announces Record First Quarter 2025 Results
- Record Q1 2025 oil, natural gas and NGL revenues of $90.0 million
- Record consolidated Adjusted EBITDA of $77.1 million including full-quarter impact
- 18% increase in quarterly distribution to $0.47 per unit
- Strong balance sheet with 0.9x net debt to EBITDA ratio
- Credit facility increased from $550M to $625M
- 90 active rigs representing 16% market share of U.S. land rig count
- 70% of distribution expected to be tax-advantaged return of capital
- Increased debt position to $299.0 million as of March 31, 2025
- Expected increase in debt to $462.1 million after preferred unit redemption
Insights
Record Q1 results with 17.5% dividend increase yield 15.8% annualized return with 70% tax-advantaged as return of capital.
Kimbell Royalty Partners has delivered exceptional Q1 2025 financial results across all key metrics. The company achieved record revenues of $90.0 million from oil, natural gas, and NGLs, while generating net income of $25.9 million and record consolidated Adjusted EBITDA of $75.5 million. These robust results were partially driven by the successful integration of a $230 million acquisition that closed in January.
The company's balance sheet strength is evident with debt metrics remaining conservative - net debt to EBITDA of 0.9x as of quarter-end. KRP's lenders have demonstrated confidence in the company's assets by increasing the borrowing base from $550 million to $625 million. Management's strategic decision to redeem 50% of outstanding preferred units is particularly noteworthy as it simplifies the capital structure and reduces the company's cost of capital.
For income investors, KRP announced a Q1 distribution of $0.47 per unit, representing a 17.5% increase from the previous quarter and yielding an impressive 15.8% annualized return. What makes this distribution especially attractive is that approximately 70% is classified as return of capital, making it significantly more tax-efficient than ordinary dividends.
The company's balanced capital allocation approach - distributing 75% of available cash while using 25% to reduce debt - demonstrates financial discipline. With 8.10 net DUCs and permitted locations versus only 6.5 needed to maintain production, KRP has clear visibility into organic growth. The 90 rigs actively drilling on KRP acreage (representing 16% of all U.S. land rigs) indicate strong ongoing development activity that should sustain future royalty income.
KRP's diversified portfolio across 131,000 wells in 28 states provides stability, while its comprehensive hedging program extending into 2027 offers downside protection against commodity price volatility. This combination of record financial results, increasing tax-advantaged distributions, and robust operational metrics positions Kimbell Royalty Partners for continued strong performance.
Record Oil, Natural Gas and NGL Revenues, Net Income of
Q1 2025 Run-Rate Daily Production of 25,841 Boe/d (6:1) Including a Full-Quarter of Acquired Production; Exceeds Mid-Point of Guidance
Redeemed
Borrowing Base and Aggregate Commitments on Kimbell's Secured Revolving Credit Facility Increased from
Activity on Acreage Remains Robust with 90 Active Rigs Drilling Representing
Announces Q1 2025 Cash Distribution of
First Quarter 2025 Highlights
- Q1 2025 run-rate daily production of 25,501 barrels of oil equivalent ("Boe") per day (6:1)
- Includes 74 days of production from the Company's
$230 million - Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, run-rate production was 25,841 Boe per day (6:1)
- Includes 74 days of production from the Company's
- Record Q1 2025 oil, natural gas and NGL revenues of
$90.0 million - Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, Q1 2025 oil, natural gas and NGL revenues were
$91.6 million
- Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, Q1 2025 oil, natural gas and NGL revenues were
- Q1 2025 net income of approximately
$25.9 million $17.9 million - Record Q1 2025 consolidated Adjusted EBITDA of
$75.5 million - Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, consolidated Adjusted EBITDA was
$77.1 million
- Including a full Q1 2025 impact of the Acquired Production, the revenues of which will be received by the Company, consolidated Adjusted EBITDA was
- On May 7, 2025, Kimbell redeemed
50% of its Series A Cumulative Convertible Preferred Units outstanding, further simplifying its capital structure and reducing its cost of capital - On May 1, 2025, the borrowing base and aggregate commitments on Kimbell's secured revolving credit facility were increased from
$550 million $625 million - As of March 31, 2025, Kimbell's major properties3 had 8.10 net DUCs and net permitted locations on its acreage (4.67 net DUCs and 3.43 net permitted locations) compared to an estimated 6.5 net wells needed to maintain flat production
- As of March 31, 2025, Kimbell had 90 rigs actively drilling on its acreage, representing approximately
16% market share of all land rigs drilling in the continentalUnited States as of such time - Announced a Q1 2025 cash distribution of
$0.47 17.5% from Q4 2024, reflecting a payout ratio of75% of cash available for distribution; implies a15.8% annualized yield based on the May 7, 2025 closing price of$11.88 25% of its cash available for distribution to repay a portion of the outstanding borrowings under Kimbell's revolving credit facility - Kimbell affirms its financial and operational guidance ranges for 2025 previously disclosed in its Q4 2024 earnings release
Robert Ravnaas, Chairman and Chief Executive Officer of Kimbell Royalty GP, LLC, Kimbell's general partner (the "General Partner"), commented, "We are beginning 2025 with several new milestones for Kimbell, which include records for oil, natural gas and NGL revenues, consolidated adjusted EBITDA and cash available for distribution for Q1 2025. Other 2025 milestones so far include completing a highly attractive and accretive acquisition in the core of the Permian Basin on January 17, 2025, increasing the Company's borrowing base and elected commitments on the credit facility from
"We are pleased to declare the Q1 2025 distribution of
"As we look forward in 2025 and beyond, we remain bullish about the
First Quarter 2025 Distribution and Debt Repayment
Today, the Board of Directors of the General Partner (the "Board of Directors") approved a cash distribution payment to common unitholders of
Kimbell expects that approximately
Financial Highlights
Kimbell's first quarter 2025 average realized price per Bbl of oil was
During the first quarter of 2025, the Company's total revenues were
Total first quarter 2025 consolidated Adjusted EBITDA was
In the first quarter of 2025, G&A expense was
As of March 31, 2025, Kimbell had approximately
On May 1, 2025, the borrowing base and aggregate commitments on Kimbell's secured revolving credit facility were increased from
As of March 31, 2025, Kimbell had outstanding 93,396,488 common units and 14,491,540 Class B units. As of May 8, 2025, Kimbell had outstanding 93,396,488 common units and 14,491,540 Class B units.
Production
First quarter 2025 run-rate average daily production was 25,501 Boe per day (6:1), which was composed of approximately
Operational Update
As of March 31, 2025, Kimbell's major properties had 808 gross (4.67 net) DUCs and 682 gross (3.43 net) permitted locations on its acreage. In addition, as of March 31, 2025, Kimbell had 90 rigs actively drilling on its acreage, which represents an approximate
Basin | Gross DUCs as of | Gross Permits as of | Net DUCs as of | Net Permits as of |
Permian | 503 | 491 | 2.64 | 2.55 |
Eagle Ford | 67 | 22 | 0.32 | 0.08 |
Haynesville | 40 | 22 | 0.37 | 0.16 |
Mid-Continent | 114 | 78 | 0.91 | 0.41 |
Bakken | 70 | 67 | 0.31 | 0.22 |
Appalachia | 2 | 1 | 0.02 | 0.00 |
Rockies | 12 | 1 | 0.10 | 0.01 |
Total | 808 | 682 | 4.67 | 3.43 |
______________________________________________________________________________________________________________________________________________________________ |
Hedging Update
The following provides information concerning Kimbell's hedge book as of March 31, 2025:
Fixed Price Swaps as of March 31, 2025 | ||||
Weighted Average | ||||
Volumes | Fixed Price | |||
Oil | Nat Gas | Oil | Nat Gas | |
BBL | MMBTU | $/BBL | $/MMBTU | |
2Q 2025 | 140,686 | 1,310,127 | $ 67.64 | $ 3.52 |
3Q 2025 | 136,068 | 1,261,964 | $ 74.20 | $ 3.74 |
4Q 2025 | 146,372 | 1,291,680 | $ 68.26 | $ 3.68 |
1Q 2026 | 146,880 | 1,296,000 | $ 70.38 | $ 4.07 |
2Q 2026 | 148,512 | 1,310,400 | $ 70.78 | $ 3.33 |
3Q 2026 | 150,144 | 1,324,800 | $ 66.60 | $ 3.42 |
4Q 2026 | 150,144 | 1,324,800 | $ 63.33 | $ 3.94 |
1Q 2027 | 151,470 | 1,321,920 | $ 63.75 | $ 4.46 |
Conference Call
Kimbell Royalty Partners will host a conference call and webcast today at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss first quarter 2025 results. To access the call live by phone, dial 201-389-0869 and ask for the Kimbell Royalty Partners call at least 10 minutes prior to the start time. A telephonic replay will be available through May 15, 2025 by dialing 201-612-7415 and using the conference ID 13752275#. A webcast of the call will also be available live and for later replay on Kimbell's website at http://kimbellrp.investorroom.com under the Events and Presentations tab.
Presentation
On May 8, 2025, Kimbell posted an updated investor presentation on its website. The presentation may be found at http://kimbellrp.investorroom.com under the Events and Presentations tab. Information on Kimbell's website does not constitute a portion of this news release.
About Kimbell Royalty Partners, LP
Kimbell (NYSE: KRP) is a leading oil and gas mineral and royalty company based in
Forward-Looking Statements
This news release includes forward-looking statements, in particular statements relating to Kimbell's financial, operating and production results and prospects for growth (including financial and operational guidance), drilling inventory, growth potential, identified locations and all other estimates and predictions resulting from Kimbell's portfolio review, the tax treatment of Kimbell's distributions, changes in Kimbell's capital structure, future natural gas and other commodity prices and changes to supply and demand for oil, natural gas and NGLs. These and other forward-looking statements involve risks and uncertainties, including risks that the anticipated benefits of acquisitions are not realized and uncertainties relating to Kimbell's business, prospects for growth and acquisitions and the securities markets generally, as well as risks inherent in oil and natural gas drilling and production activities, including risks with respect to potential declines in prices for oil and natural gas that could result in downward revisions to the value of proved reserves or otherwise cause operators to delay or suspend planned drilling and completion operations or reduce production levels, which would adversely impact cash flow, risks relating to the impairment of oil and natural gas properties, risk related to changes in
1 Based on Kimbell rig count of 90 and Baker Hughes
2 Based on Kimbell's closing price of
3 These figures pertain only to Kimbell's major properties and do not include possible additional DUCs and permits from Kimbell's minor properties, which generally have a net revenue interest of
Contact:
Rick Black
Dennard Lascar Investor Relations
krp@dennardlascar.com
(713) 529-6600
– Financial statements follow –
Kimbell Royalty Partners, LP Condensed Consolidated Balance Sheet (Unaudited, in thousands)
| ||
March 31, | ||
2025 | ||
Assets: | ||
Current assets | ||
Cash and cash equivalents | $ | 35,628 |
Oil, natural gas and NGL receivables | 60,998 | |
Accounts receivable and other current assets | 2,755 | |
Total current assets | 99,381 | |
Property and equipment, net | 476 | |
Oil and natural gas properties | ||
Oil and natural gas properties (full cost method) | 2,271,330 | |
Less: accumulated depreciation, depletion and impairment | (1,054,916) | |
Total oil and natural gas properties, net | 1,216,414 | |
Right-of-use assets, net | 4,869 | |
Loan origination costs, net | 4,728 | |
Total assets | $ | 1,325,868 |
Liabilities, mezzanine equity and unitholders' equity: | ||
Current liabilities | ||
Accounts payable | $ | 5,474 |
Other current liabilities | 7,883 | |
Derivative liabilities | 3,165 | |
Total current liabilities | 16,522 | |
Operating lease liabilities, excluding current portion | 4,653 | |
Derivative liabilities | 1,988 | |
Long-term debt | 298,996 | |
Other liabilities | 42 | |
Total liabilities | 322,201 | |
Commitments and contingencies | ||
Mezzanine equity: | ||
Series A preferred units | 316,397 | |
Kimbell Royalty Partners, LP unitholders' equity: | ||
Common units | 594,231 | |
Class B units | 724 | |
Total Kimbell Royalty Partners, LP unitholders' equity | 594,955 | |
Non-controlling interest in OpCo | 92,315 | |
Total unitholders' equity | 687,270 | |
Total liabilities, mezzanine equity and unitholders' equity | $ | 1,325,868 |
Kimbell Royalty Partners, LP Condensed Consolidated Statements of Operations (Unaudited, in thousands, except per-unit data and unit counts)
| |||||
Three Months Ended | Three Months Ended | ||||
March 31, 2025 | March 31, 2024 | ||||
Revenue | |||||
Oil, natural gas and NGL revenues | $ | 89,951 | $ | 87,499 | |
Lease bonus and other income | 311 | 439 | |||
Loss on commodity derivative instruments, net | (6,053) | (5,704) | |||
Total revenues | 84,209 | 82,234 | |||
Costs and expenses | |||||
Production and ad valorem taxes | 5,375 | 6,532 | |||
Depreciation and depletion expense | 31,118 | 38,167 | |||
Impairment of oil and natural gas properties | — | 5,963 | |||
Marketing and other deductions | 4,502 | 4,563 | |||
General and administrative expense | 9,637 | 9,448 | |||
Total costs and expenses | 50,632 | 64,673 | |||
Operating income | 33,577 | 17,561 | |||
Other expense | |||||
Interest expense | (6,622) | (7,301) | |||
Other expense | (12) | — | |||
Net income before income taxes | 26,943 | 10,260 | |||
Income tax expense | 1,090 | 923 | |||
Net income | 25,853 | 9,337 | |||
Distribution and accretion on Series A preferred units | (5,203) | (5,256) | |||
Net income attributable to non-controlling interests | (2,774) | (891) | |||
Distributions on Class B units | (14) | (21) | |||
Net income attributable to common units of Kimbell Royalty Partners, LP | $ | 17,862 | $ | 3,169 | |
Basic | $ | 0.20 | $ | 0.04 | |
Diluted | $ | 0.20 | $ | 0.04 | |
Weighted average number of common units outstanding | |||||
Basic | 89,682,038 | 72,112,056 | |||
Diluted | 127,947,257 | 116,539,624 | |||
Kimbell Royalty Partners, LP
Supplemental Schedules
NON-GAAP FINANCIAL MEASURES
Adjusted EBITDA, Cash G&A and Cash G&A per Boe are used as supplemental non-GAAP financial measures by management and external users of Kimbell's financial statements, such as industry analysts, investors, lenders and rating agencies. Kimbell believes Adjusted EBITDA is useful because it allows us to more effectively evaluate Kimbell's operating performance and compare the results of Kimbell's operations period to period without regard to its financing methods or capital structure. In addition, management uses Adjusted EBITDA to evaluate cash flow available to pay distributions to Kimbell's unitholders. Kimbell defines Adjusted EBITDA as net income (loss), net of depreciation and depletion expense, interest expense, income taxes, impairment of oil and natural gas properties, non-cash unit-based compensation and unrealized gains and losses on derivative instruments. Adjusted EBITDA is not a measure of net income (loss) or net cash provided by operating activities as determined by GAAP. Kimbell excludes the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially from company to company within Kimbell's industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company's financial performance, such as a company's cost of capital and tax structure, as well as historic costs of depreciable assets, none of which are components of Adjusted EBITDA. Adjusted EBITDA should not be considered an alternative to net income, oil, natural gas and natural gas liquids revenues, net cash provided by operating activities or any other measure of financial performance or liquidity presented in accordance with GAAP. Kimbell's computations of Adjusted EBITDA may not be comparable to other similarly titled measures of other companies. Kimbell expects that cash available for distribution for each quarter will generally equal its Adjusted EBITDA for the quarter, less cash needed for debt service and other contractual obligations, tax obligations, and fixed charges and reserves for future operating or capital needs that the Board of Directors may determine is appropriate.
Kimbell believes Cash G&A and Cash G&A per Boe are useful metrics because they isolate cash costs within overall G&A expense and measure cash costs relative to overall production, which is a widely utilized metric to evaluate operational performance within the energy sector. Cash G&A is defined as general and administrative expenses less unit-based compensation expense. Cash G&A per Boe is defined as Cash G&A divided by total production for a period. Cash G&A should not be considered an alternative to G&A expense presented in accordance with GAAP. Kimbell's computations of Cash G&A and Cash G&A per Boe may not be comparable to other similarly titled measures of other companies.
Kimbell Royalty Partners, LP Supplemental Schedules (Unaudited, in thousands)
| |||||
Three Months Ended | Three Months Ended | ||||
March 31, 2025 | March 31, 2024 | ||||
Reconciliation of net cash provided by operating activities | |||||
to Adjusted EBITDA and cash available for distribution | |||||
Net cash provided by operating activities | $ | 54,153 | $ | 69,046 | |
Interest expense | 6,622 | 7,301 | |||
Income tax expense | 1,090 | 923 | |||
Impairment of oil and natural gas properties | — | (5,963) | |||
Amortization of right-of-use assets | (85) | (86) | |||
Amortization of loan origination costs | (534) | (530) | |||
Unit-based compensation | (3,861) | (3,684) | |||
Forfeiture of restricted units | 57 | — | |||
Loss on derivative instruments, net of settlements | (6,989) | (8,738) | |||
Changes in operating assets and liabilities: | |||||
Oil, natural gas and NGL revenues receivable | 15,074 | (4,316) | |||
Accounts receivable and other current assets | (17) | 1,149 | |||
Accounts payable | 938 | (313) | |||
Other current liabilities | (1,826) | 847 | |||
Operating lease liabilities | 61 | 92 | |||
Consolidated EBITDA | $ | 64,683 | $ | 55,728 | |
Add: | |||||
Impairment of oil and natural gas properties | — | 5,963 | |||
Unit-based compensation | 3,861 | 3,684 | |||
Loss on derivative instruments, net of settlements | 6,989 | 8,738 | |||
Consolidated Adjusted EBITDA | $ | 75,533 | $ | 74,113 | |
Adjusted EBITDA attributable to non-controlling interest | (10,146) | (16,180) | |||
Adjusted EBITDA attributable to Kimbell Royalty Partners, LP | $ | 65,387 | $ | 57,933 | |
Adjustments to reconcile Adjusted EBITDA to cash available | |||||
for distribution | |||||
Less: | |||||
Cash interest expense | 4,051 | 5,234 | |||
Cash distributions on Series A preferred units | 4,163 | 3,800 | |||
Distributions on Class B units | 14 | 21 | |||
Cash available for distribution on common units | $ | 57,159 | $ | 48,878 | |
Kimbell Royalty Partners, LP Supplemental Schedules (Unaudited, in thousands, except for per-unit data and unit counts)
| ||
Three Months Ended | ||
March 31, 2025 | ||
Net income | $ | 25,853 |
Depreciation and depletion expense | 31,118 | |
Interest expense | 6,622 | |
Income tax expense | 1,090 | |
Consolidated EBITDA | $ | 64,683 |
Unit-based compensation | 3,861 | |
Loss on derivative instruments, net of settlements | 6,989 | |
Consolidated Adjusted EBITDA | $ | 75,533 |
Adjusted EBITDA attributable to non-controlling interest | (10,146) | |
Adjusted EBITDA attributable to Kimbell Royalty Partners, LP | $ | 65,387 |
Adjustments to reconcile Adjusted EBITDA to cash available | ||
for distribution | ||
Less: | ||
Cash interest expense | 4,051 | |
Cash distributions on Series A preferred units | 4,163 | |
Distributions on Class B units | 14 | |
Cash available for distribution on common units | $ | 57,159 |
Common units outstanding on March 31, 2025 | 93,396,488 | |
Common units outstanding on May 20, 2025 Record Date | 93,396,488 | |
Cash available for distribution per common unit outstanding | $ | 0.61 |
First quarter 2025 distribution declared (1) | $ | 0.47 |
(1) The difference between the declared distribution and the cash available for distribution is primarily attributable to Kimbell allocating |
Kimbell Royalty Partners, LP Supplemental Schedules (Unaudited, in thousands, except for per-unit data and unit counts)
| ||
Three Months Ended | ||
March 31, 2024 | ||
Net income | $ | 9,337 |
Depreciation and depletion expense | 38,167 | |
Interest expense | 7,301 | |
Income tax expense | 923 | |
Consolidated EBITDA | $ | 55,728 |
Impairment of oil and natural gas properties | 5,963 | |
Unit-based compensation | 3,684 | |
Loss on derivative instruments, net of settlements | 8,738 | |
Consolidated Adjusted EBITDA | $ | 74,113 |
Adjusted EBITDA attributable to non-controlling interest | (16,180) | |
Adjusted EBITDA attributable to Kimbell Royalty Partners, LP | $ | 57,933 |
Adjustments to reconcile Adjusted EBITDA to cash available | ||
for distribution | ||
Less: | ||
Cash interest expense | 5,234 | |
Cash distributions on Series A preferred units | 3,800 | |
Distributions on Class B units | 21 | |
Cash available for distribution on common units | $ | 48,878 |
Common units outstanding on March 31, 2024 | 74,646,476 | |
Common units outstanding on May 13, 2024 Record Date | 74,646,476 | |
Cash available for distribution per common unit outstanding | $ | 0.65 |
First quarter 2024 distribution declared (1) | $ | 0.49 |
(1) The difference between the declared distribution and the cash available for distribution is primarily attributable to Kimbell allocating |
Kimbell Royalty Partners, LP Supplemental Schedules (Unaudited, in thousands)
| ||
Three Months Ended | ||
March 31, 2025 | ||
Net income | $ | 25,853 |
Depreciation and depletion expense | 31,118 | |
Interest expense | 6,622 | |
Income tax expense | 1,090 | |
Consolidated EBITDA | $ | 64,683 |
Unit-based compensation | 3,861 | |
Loss on derivative instruments, net of settlements | 6,989 | |
Consolidated Adjusted EBITDA | $ | 75,533 |
Q2 2024 - Q4 2024 Consolidated Adjusted EBITDA (1) | 215,034 | |
Trailing Twelve Month Consolidated Adjusted EBITDA | $ | 290,567 |
Long-term debt (as of 3/31/25) | 298,996 | |
Cash and cash equivalents (as of 3/31/25) (2) | (25,000) | |
Net debt (as of 3/31/25) | $ | 273,996 |
Net Debt to Trailing Twelve Month Consolidated Adjusted EBITDA | 0.9x | |
(1) Consolidated Adjusted EBITDA for each of the quarters ended June 30, 2024, September 30, 2024 and December 31, 2024 was previously reported in a news release relating to the applicable quarter, and the reconciliation of net income to consolidated Adjusted EBITDA for each quarter is included in the applicable news release. This also includes the trailing twelve months pro forma results from the Q1 2025 acquisition that closed in January 2025 in accordance with Kimbell's secured revolving credit facility. |
(2) In accordance with Kimbell's secured revolving credit facility, the maximum deduction of cash and cash equivalents to be included in the net debt calculation for compliance purposes is |
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SOURCE Kimbell Royalty Partners, LP
FAQ
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